PERF RMANCE 04 - The Performance Portal - Ernst & Young

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All hands on deck In the words of the SCALE Program Leader Joachim Hoehler: “With over 30 people from our supply chain management team actively involved in SCALE and with the participation of representatives from all the EMEALA countries in the project, we are truly building one supply chain community.” As well as the normal, more standard program management techniques and governance meeting cycles, we also worked with the FME workstream leaders to develop some additional, innovative techniques, which are certainly worthy of note due to the way in which they helped the process in FME. A program integration meeting structure was established to run on a monthly basis. This involved not only project workstream updates but also deep dive working sessions which ran along the complete supply chain (see Figure 7). Figure 7. SCALE process walkthrough A B Working agenda SCALE progress update These program integration meetings became an excellent vehicle for the SCALE team members to share knowledge and experience across each other’s areas of specialism. The opportunity this provided to learn together and often problem solve in a collaborative way, was certainly breaking new ground within FME. We also recognized that the annual supply chain summit meetings could play an important role as milestones in the ongoing change process, and in the growth and development of FME’s supply chain community. For example, in Porto, we identified that the supply chain teams recognized they were very good at fire-fighting and problem solving but needed to improve in proactively working together across the value chain and across countries to find better operational solutions. In response, one of the key developments during 2009 was the establishment of bi-monthly supply chain community conference calls which were typically joined by over 50 participants, representing most of the countries within the EMEALA region. During each call, there would be a mix of project updates both from headquarters and the countries, deep dive working sessions on a particular part of the value chain, and a brainstorm around operational hot spots and potential solutions. In the following summit meeting, in October 2009, in Seeheim, Germany, the supply chain community focused on a practical walk-through of the complete new SCALE processes. With a theme of “Moving into operations” for this summit, experiences were shared, particularly from the initial pilot countries, about the benefits being realized from the new forecast and demand planning process. This meeting really signaled the birth for this community of the new supply chain operations. By the time of the 2010 supply chain summit meeting, held near Dublin, in Ireland, participants at these events had more than doubled. The theme for the summit was “Landing, learning and living together” in the new, integrated and harmonized supply chain world. SCALE processes C D SCALE deep dive Decisions, next steps and closing comments Source: Fresenius Medical Care Deep dive: “End to end“ SCALE process walk-throughs Forecast APO DP Net demand planning Sourcing Distribution planning Value tracking By involving both sales and production in the work of the program and the summits, we were able to develop a shared goal aimed at creating a more agile and flexible production facility. An additional goal was also to develop, as well as improve, forecast accuracy and reduce stock levels. An evening, team-building event at the Guinness Storehouse in Dublin also helped grease the wheels of change and ease the transformation toward working together across the silos!
Supply chain transformation Delivering results Throughout 2010, SCALE was already beginning to deliver significant and tangible results: • Inventories merged into an EMEALA replenishment hub • Consolidation of selected warehouses into an EMEALA central warehouse • Tax benefits leveraged as appropriate • Do self-aligned sales and operations planning across EMEALA Supply chain reliability today begins with forecasting. A new harmonized SCALE forecasting process and tool has been implemented and the country feedback is positive: “We can calculate forecast for products more accurately; it becomes easier to check items that have high deviation, saving time. We focus on exception handling with product managers and communication with Sales has improved.” Alexander Gruening, Head EMEALA forecast and demand planning In addition, the new forecasting tool, called the Demand Planner (part of the SAP Advanced Planner and Optimizer), has been implemented and rolled out in 151 markets. Sales and operations planning pilots have been deployed in selected countries to provide a platform for aligning demand and supply. The rollout was organized in five waves during which users in more than 30 countries were trained over three days in how to use the system. Most of the training was held at head office in Bad Homburg, but there were also regional training sessions in local countries, e.g., the SCALEworkshop in Sao Paulo which brought together key users from the six most important Latin American countries. The SCALE stock merger initiative recently completed and, by the end of 2010, FME EMEALA saw cash savings of 15 million euros from the reduction in stock holding. “SCALE is following a well-articulated strategy, agreed with senior business management, to deliver a target of more than 35 million euros reduction of supply chain managed cash and cost positions by the end of 2012.” Thomas Dimt, Present CFO EMEALA Leveraging lessons learned We also worked closely with an internal FME consultancy group, called People, Organizational Change, Implementation (POI), to complete an extensive lessons learned exercise at the end of the second year of the SCALE program. This helped to establish the framework which we used for moving forward to complete the work. A flagship for the future "Feedback clearly shows the SCALE program has been a tremendous success within FME. It is widely recognized as a “flagship initiative” for the company, delivering in the region of 15 million euros stock reduction within the first 12 months of the ongoing implementation of this transformation program." Dr. Ulrich Weingarten, Head of supply chain operations EMEALA We are now working closely with the supply chain leadership at FME, coaching them on how to bring the program to a finish with the same professionalism and attention to detail that went into the initial launch and mobilization activities. 57
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